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Vicente Valencia

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When +20% Is the Floor — The Latin American PPP Trap

Many people challenge my preferred RFP strategy for PPPs: “Pre-qualify strong consortia, set a minimum technical pass/fail, and award to the best NPV bidder? They’ll just bid low and renegotiate later!” I get it. That tactic has been abused in Latin America for years. But we need to ask: Why has +20% (often +50%, +100%, +200%) become almost inevitable there? Let’s look at the real causes: Why PPP prices skyrocket after award 1) Renegotiation is systemic. In transport PPPs, up to 78% of...

Africa. Mid-2010s. You’re in the middle of a multibillion-dollar PPP. Your consortium is assembled. Your lenders are mobilized. Your bid team is burning cash like Tesla compensating executives… The agency launches the RFP. Everyone is excited. A fair, competitive process… in theory. And then it starts: Deadline extended. “More time to refine proposals,” they say. Another extension. Silence. And then another. “These guys don’t seem ready” Drop a new batch of documents in the data room. (Oh,...

January 5th. In Spain and many parts of the world, kids go to sleep excited because the Three Wise Men are coming with toys. Meanwhile… in Australia… a mega-project disaster. Hobart, 1975 – 9:27 PM The Tasman Bridge. A massive concrete jewel connecting both sides of the Derwent River. Strong. Modern. Safe. Until a bulk carrier called Lake Illawarra hit one of its piers. Concrete collapsed. Cars fell into the void without even seeing it. Twelve lives lost. A city cut in half for more than two...

Christmas is not my cup of tea. I guess that I’m too practical to over eat, over drink, over talk and over spend. It’s not an optimal solution. One of the things I’m trying to be practical about is gifts. In Spain, gifts are given on the 6January morning. The 3 wise men day. There is also a very famous place. El Corte Inglés… or The English Cut (?) Where you can buy all gifts. Adults and children alike. From clothing to iPads to travel packages. One shop to get everything. So, you won’t see...

Somewhere in Latin America. 2021. A consortium wins a massive infrastructure contract. Billions of dollars. Press headlines. Champagne. “We’re the best,” they say. More Champagne. Expensive hotels. More expensive restaurants. The very first project like this… ever. Yeah! Bonus. Yeah! But that was the problem. The team that won it… had zero clue how to deliver a PPP of that size. This is NOT theory. This happened in real life. Signed. Celebrated. New suits. Photos with the minister. Of course…...

They say that if you don’t get haters, it’s because you are unnoticed. They also say that if you don’t get sued, it’s because you are not achieving anything valuable. I may be talking a little personal here. But, apply this to the PPP world and you’ll get the same pattern. If you are an agency and some people don’t dislike you, you’re probably being average. You’re a kind of Care Bear, an Osito Amoroso. Spreading love. Fearful of upsetting anybody. You’re average in Averageland. And if you...

The Channel Tunnel. 50-km underwater megastructure linking France and the UK. An engineering icon. A masterpiece. A miracle of geology, finance, diplomacy, and caffeine or theine. A day like today in 1998. New Year’s Day. Half the team hungover. Half asleep. Half the world still partying. The temperature suddenly dropped. Outside: freezing. Inside the service tunnels: warm and humid. A perfect recipe for the gods of engineering to say: “Let’s mess with them.” Condensation froze. Ice formed on...

If you thought that I’ll be telling you happy new year stuff, you don’t know me enough. Once that you over drink and over eat tonight, you have one year ahead. To grow. To become better. To achieve great things. Up to you, what you want to do tomorrow. When there are some people messing around with “resaca” or a “hangover”, others will be running. Vicente Valencia Academy PD 1: If you liked this email, don't keep it in secret and forward it to a friend. They will thank you enormously one day....

Brisbane, Australia. 2011. A hot, humid year, and an even hotter PPP disaster: the Clem7 Tunnel. Traffic numbers tanked. Revenue collapsed. The SPV went into voluntary administration. And the government, tired, embarrassed, politically cornered… decided to move fast. Maybe too fast. “Take control. Sort the mess. Do it now.” And they did. At light speed. They pushed what, in PPP terms, is basically the nuclear button: step-in, buy-out, asset recovery… messily… everything at once. OMG. The...

Everything starts in a few hours. At around 9:00am. Matt Gray calls it separation. Why? Because what you choose to do at 9 a.m. tomorrow morning will separate you from 99% of your competitors. No matter is colleagues, companies or whatever. You compete. Almost for survival. While many wait to January 1st to start doing things in a new year, Matt Gray for example starts his year on October 1. While everyone else is waiting until after the holidays to start, he already knows exactly what he is...